stack of dollars and black envelope with banknotes inside

Many of us would try so hard to get going with our daily expenditures, such as house rents, mortgage payments and so on in the event we are losing income as a result of illness or an accident. Income protection which is a long-term insurance plan helps us to get a regular income until we recover and get back to work or until we retire.

Income protection insurance policy can be bought from either an independent financial adviser, who can look at all the policies on offer and choose the best for you or you may have buy directly from an insurance company.

In the event you decide to buy from an insurance company directly, it is advisable you shop around to see who will give you the best offer. Premiums can vary and different insurers can use very different criteria. So it’s worth shopping around and doing a bit of research. 

The best way to make sure you get what you need when buying income protection insurance is to get advice from a specialist broker who will take you through the details of the various policies available, and make sure you choose the right one by showing you the pros and cons of such a policy. These brokers may charge a fee for their services, or you may have to pay them on commission basis. Furthermore, there are also specialist brokers and insurers for people who have been declined insurance. This might be perhaps because of a medical condition or because they do a job that isn’t covered by standard policies.


Some benefits Income protection insurance includes;

  1. It provides regular pay outs that replace part of your income if you’re unable to work due to illness or an accident
  2. Provides payments until you can start working again or until you retire, die or reach the end of the policy term whichever comes first
  3. Clearly pays out between 50% and 65% of your income if you’re unable to work as a result of accident or sickness
  4. It offers coverage for most illnesses that leave you unable to work. This can either be in the short or long term depending on the type of policy and its coverage.
  5. There is no restriction on the number of times you can file for claims
  6. while the policy lasts.


There’s often a pre-agreed waiting or probation period before the payments of benefits start. In some policies, you may have to wait a minimum of four weeks after you stop work for payments to start. This is called the waiting period. Some waiting periods last up to two years. The amount of premium you pay for the insurance policy may be cheaper if you can wait longer before you make a claim. You can’t claim income protection payments straightaway if you fall ill or become disabled. You usually have to wait a minimum of four weeks but payments can start up to two years after you stop work.

The most common waiting periods are 4, 13, 26 weeks and a year. And as I said earlier, the longer your waiting period, the lower your premiums.

When to buy income protection insurance

The best time to buy income protection insurance is when you become employed or engaged with any venture that gives you regular income. This most especially if you are engaged in a potentially risky job

When we’re unable to work due to illness or an accident, you might assume that your employer will continue to give you some level of income.

In reality, however, employees are usually moved onto Statutory Sick Pay within six months.

Very few employers support their staff for more than a year if they’re off sick from work.

Depending on the level of savings you have, the loss of an income can soon leave you unable to pay essential household bills, such as mortgage/rent and utilities.

It can be particularly difficult if you’re self-employed and so have no sick pay to fall back on.

Factors that affects its rates of premiums

  1. Your age – the older you are when you take out the policy, the more you are likely to pay, as your risk of getting ill increases.
  2. Level of coverage- the nature of illnesses and injuries that enjoy coverage
  1. Your health – if you’re in good health, you will pay less to insure yourself, your current weight and family medical history.
  2. Your job – if you do a risky job, you will pay more for cover
  3. Hobbies and lifestyle – if you take part in dangerous hobbies or you smoke or drink heavily, you will pay more for cover
  4. The waiting or deferred period – the longer you will be able to wait before you file for a claim, the cheaper your premiums will be
  5. Readiness to undertake other kinds of work than your own if you get ill will usually costs less in premiums payable for a policy. That is, if you say you will only make a claim if you are unable to do any work at all, rather than just your own job.
  6. The percentage of income you are covering in the policy
  7. The rates of premiums may also be affected by whether you pay standard premiums liable for upward review from time to time by the insurer or a guaranteed premium which remains static provided the policy is still alive.

What it may not cover?

There are some instances where, generally, Income Protection insurance will not provide you coverage and they are;

  1.  If your illness or injury was caused by war,
  2. When your injury occurs while taking part in a dangerous activity without suitable protective equipment or training.
  3. If it is a cosmetic surgery
  4. When you have a pre- existing medical conditions- illnesses which you or members of your family have had before.

You might not need income protection insurance if:

  1. If you have an employee benefits package that will give you an income for 12 months or more if you sustain  injury or sick and is unable to work
  2. When there is presence of government benefits you can survive on when sick or injured but make sure that they are enough to cover all your expenditures.
  3. If you have enough savings to support yourself but be certain that it is enough to last for  good length of time as your savings might need to last a long time
  4. When your partner or family would support you. In other words, if your partner has enough income to cover all your expenditures

Guides about income protection insurance

 You have to be honest about your medical history and other information

You have to answer truthfully when your insurer asks questions about your medical history and indeed other questions. It’s very important to give your insurer true answers to all the information they ask for. This is because the insurer will check your medical history and other information when you file for a claim. If you didn’t answer truthfully or accurately, or didn’t disclose certain information, you might be denied benefits.

 Choose a suitable level of cover

There are three levels of cover you can choose from and the payouts are on the basis of your peculiar situation. These levels of cover are;

Own-occupation cover: This is usually the most expensive. But there is more likelihood that you’ll make a successful claim.

Suited occupation cover:  this covers when you can’t do your own job or a similar one that suits your qualifications and experience.

Any occupation: this covers you when you will not be able to do any kind of work as a result of illness or injury. This is usually the cheapest. However, there is a higher risk of it not paying out.

 Always read your policy terms

You must take your time to carefully read the terms of the policy when completing the application. Make sure you know exactly what is and what does not enjoy coverage- exclusion clauses. Ensure you seek clarifications if there are terms you don’t understand. The service of an insurance broker may be of assistance at this point.

You can withdraw

If you eventually buy the policy, you have 30 days from buying the policy to change your mind and get a complete refund of all your premiums.

Keep your cover up-to-date

Circumstances can change over time and you might need more cover than your policy presently provides. Therefore, it is necessary to review your policy regularly to make sure that it would still cover what you need. This is to enable you increase your coverage if there is need. For example, if you have a new mortgage or a child.


If you take out income protection insurance, you usually have 30 days to cancel the policy and get a full refund.

If you decide to cancel the policy after 30 days, the money you are to get as refund may be less than the amount you have put in. Check your policy’s terms and conditions.

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